BI-7 day RR Rate Kept

On Thursday (May 18), the Central Bank (Bank Indonesia/BI) decided to hold the BI 7-day (Reverse) Repo Rate (BI-7 day RR Rate) at 4.75%, maintained for past eight consecutives months. BI also maintained the Deposit Facility and Lending Facility rates at 4% and 5.5% respectively. BI wants to maintain macroeconomic and financial system stability, where preserving domestic economic recovery momentum. BI however said it shall remain vigilant of global risks mainly the development of U.S.’ policy and geopolitical issue especially relating to Korea. On domestic front, BI should concern on some risks such as the adjustment of administered prices (the inflation risk) and the sustained consolidation of corporates and banking sector.